Solo 401k Lending to itself

[Wes Aldo]

With a Solo 401k having a Traditional component and a Roth component; can the Traditional account loan the Roth account funds for the purchase of real estate?

Example:  $100k in Traditional account & $20k in Roth account.  Can Roth account purchase property for $100k utilizing a loan from the Traditional account?  This way the profits from the real estate sale would be tax free in the Roth account.

Thank you for any feedback.

[Dmitriy Fomichenko]

@Wes Aldo 

Loren is correct, what you are describing is a prohibited transaction. What you can do is convert your pre-tax 401k into a Roth, then invest with it. This way you will accomplish your goal of profits from the sale being tax free down the road. But the conversion will be taxable event so be sure to speak with the tax expert about tax implications.